FHA loan residency requirements

The
FHA loan is one of the easiest ways to finance a new home. The
FHA loan program was created under Franklin Roosevelt’s New Deal
program to help the housing industry and make it possible for
home buyers of modest means to purchase homes. The following
information is provided to illustrate the minimal qualifications
for an FHA loan. If you meet the following guidelines, you may
qualify for an FHA mortgage loan.

FHA AGE REQUIREMENT

The FHA loan program does not have a minimum age requirement;
however, the borrower must be old enough to meet the age
requirement that a mortgage note can be legally enforced in the
state, or other jurisdiction, where the home is located. There
is no maximum age requirement.

SOCIAL SECURITY NUMBER REQUIREMENT

All applicants are required to have a valid social security
number.

FHA LOAN CITIZENSHIP REQUIREMENT

In addition to US citizens, lawful permanent resident aliens,
and non-permanent resident aliens are eligible for an FHA loan.
Permanent resident aliens are required to provide evidence of
their permanent residency, and state their residency status on
the mortgage application. Non-permanent resident aliens must
state that the home will be the principal residence, have a
valid social security number, and are eligible to work in the
United States, confirmed by the Employment Authorization
Document (EAD) issued by the USCIS. Non-U.S. citizens without
lawful residency in the U.S. are not eligible for FHA mortgages.

FHA LOAN MINIMUM CREDIT SCORE

The FHA guidelines permits a credit score as low as 500 for home buyers.
However, credit scores between 500 and 579 require a down
payment of at least 10%. A credit score of 580 or higher are
eligible for the FHA minimum down payment of 3.5% (i.e. 3.5% X
$100,000 = $3,500). Lenders are permitted by the Federal Housing
Administration to exceed the minimum credit scores for loan
approval.

FHA LOAN EMPLOYMENT & INCOME REQUIREMENTS

The lender needs to verify the applicant's most recent two years
of employment and income. W-2's are typically used to verify
employment. The FHA requires a paystub referencing the year to
date earnings; or in the alternative, the lender can contact the
employer directly by phone or mail. The FHA guidelines do not
specifically address whether the applicant is required to be
employed for the previous two years prior to application.

Applicants may qualify if gaps in employment greater than six
months or longer (an extended absence), if the applicant has
been employed in the same job for a minimum of six months at the
time of application; and has a two year work history prior to
the absence from employment.

Most FHA lenders want an FHA mortgage payment to be no more than
29% of the applicant's monthly income. The mortgage payment
consists of principal & interest, 1/12 of the annual real estate
taxes & homeowner's insurance and monthly mortgage insurance
premium.

The calculators and information contained herein are made available to
you as a self-help tool for illustrative use only. Examples are hypothetical.
We can not and do not guarantee the applicability or accuracy in regards
to your individual circumstances. I encourage you to seek personalized advice
from qualified professionals.